BioWorld International Correspondent

LONDON - CeNeS Pharmaceuticals plc announced a fully underwritten placing and open offer raising £11.4 million (US$20.3 million) to fund a second Phase III trial and registration of its morphine metabolite, M6G, in the treatment of postoperative pain.

The fund raising comes two weeks after the Cambridge, UK-based company released positive data from the first European Phase III trial showing M6G had equivalent analgesic effect to morphine. Now CeNeS needs to demonstrate a superior side effect profile, in particular that patients given M6G as a postoperative painkiller suffer less nausea and vomiting than those receiving morphine.

The study is expected to be completed in 2005, with a possible registration in 2006.

The money also will enable the company to extend the M6G clinical program to the U.S., completing additional preclinical studies required by the FDA and applying for an investigational new drug application next year. CeNeS has been advised that armed with the European data file it will be necessary to carry out only one Phase III study for U.S. registration.

Neil Clark, chief operating officer, told BioWorld International: "If we didn't have a good story, we wouldn't be able to raise this money. When we announced the positive Phase III results, we found the support was there."

Apart from securing funding to take M6G through to registration in Europe, Clark said the placing also will improve the profile of the company's investor base. Although it is quoted on the Alternative Investment Market in London, CeNeS never filed an initial public offering because it was formed by the reverse takeover of Core Group plc. "Previously we had no institutional shareholders with over 3 percent, and so this fund raising will mean a major restructuring and upgrading of the shareholder base," Clark said.

CeNeS is placing 151.7 million shares at 7.5 pence, a discount of 1.5 pence to the closing price Oct. 4. The deal is fully underwritten by the company's broker, Nomura. Existing investors entitled to 20 percent of the shares are not taking them, allowing the shares to be placed with institutional investors.

"Clinical excellence has always existed in CeNeS. Now we have got [London's] support, we have got to keep batting away," Clark said. "The big event for us will be the registration of a product, which is a pretty rare event for UK biotechnology."

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